Hong Kong Office and Retail Investment

Housing Investment Consultancy
Office and Retail Investment

October 2018

The first minor declines in Central Grade A office prices since 2008 alongside the divestment of retail portfolios by some veteran investors suggest that the current upcycle is fragile.

We have recorded the first minor decline in Central Grade A office prices since 2008 (-3% q-o-q) and this may well be a sign of further adjustments to come, although falls have not been uniform across all districts.

The lower-than-expected asking prices for The Center suppressed values elsewhere in Central, while the shift of market focus from Kowloon East to Tsim Sha Tsui reduced investment interest in decentralized areas.

En-bloc commercial premises were still highly sought after during the quarter with 8 Observatory Road sold to a local family via company transfer for HK$4.1 billion.

The retail recovery story was clouded by some veteran investors divesting their commercial portfolios, causing overall prices to register a moderate decline.

A weakening macro environment, including the first rate hike in 12 years, capital outflows from the banking system, a depreciating RMB as well as the US-China trade war all contributed to cooling investment sentiment.

Looking ahead, a cyclical adjustment in the Hong Kong commercial property market may be with us sooner than expected.

 

Key contacts

Simon Smith

Simon Smith

Senior Director
Research & Consultancy

kamaco Two Exchange Square

+852 2842 4573

 

Subscribe to kamaco research

 

Would you like to be notified via email about new research?